Delta in the world

Spain

The 92,212 km2 of Portugal soon proved too small for the ambition of the founder of Delta. Showing the quality of Delta coffee to the world was Rui Nabeiro’s mission. His dream? To turn the company he founded in a small warehouse in Campo Maior, in 1961, into one of the largest in the world in the coffee business.

Delta’s international expansion happened in two ways: first very slowly, and then suddenly. Only in 1986 did Delta open its first commercial department outside its own facilities – but not far from home, since the choice fell on Badajoz, half an hour by car from Campo Maior.

Today, Grupo Nabeiro also has direct operations in France, Switzerland, Luxembourg, Angola, Brazil and China, in addition to Spain. All are commercial operations, with the exception of Angola, where the Group has a manufacturing unit that mainly serves direct consumption, through the brand Ginga, in capsules, beans and ground coffee. There are also another 35 countries, on five continents, where the coffee from Campo Maior arrives through distributors, partners and agents.

“In total, we should be 650 people working in the international area, of whom 620 are abroad,” says the director of international markets at Grupo Nabeiro, Alberto Pinto, in an interview in Lisbon, where the remaining 26 people (out of the 650) are based – there are four employees at Novadelta, in Campo Maior.

In Spain alone there are 330 employees, spread across 16 branches, led by Pedro Cordeiro. “It is our largest operation outside Portugal. We should have a market share of around 4 or 5%, with a stronger presence in Extremadura and Andalusia, where the expansion began. Directly, we have been in Spain for 37 years, but the connection goes back to the very first day, if only because of Delta’s location in the Raia area, right next to the border.”

Of a global turnover of 460 million euros in 2022, 30% of the business comes from the international area and, of that share, 40% relates to the Spanish market. “For the economic and financial sustainability of Delta it is important that we are not dependent on the Portuguese market,” admits Rui Miguel Nabeiro. “Twenty years ago, when I joined, Delta was 90% Portugal and, of this, 80% was only the Horeca channel [hotels, restaurants and cafés]. If we had not made the move to grow in capsules and in the retail market, and to grow in international markets, the pandemic period would have been catastrophic. We would have seen 90% of the business disappear, which did not happen.”

The goal now is to grow the Delta Q capsule business and open The Coffee House Experience stores in the land of nuestros hermanos. “We have four stores in Portugal and we will enter Spain and France. Our idea is to sell a different, high‑quality product, but also to offer experiences built around coffee.”

Angola

In 1975, the country was the fourth-largest coffee producer in the world, producing 200,000 tonnes per year. “Angola was once the main source of green coffee for Delta. Mr. Nabeiro went there many times. That is where everything began,” recalls Alberto Pinto. The most famous trip, the result of a bold decision, took place on 10 November 1975, the eve of independence.

Aware of how the national market depended on Angolan production, and foreseeing major political changes in the country, Rui Nabeiro set off for Angola when most Portuguese people were travelling in the opposite direction. The trip was a success: Nabeiro secured tens of thousands of sacks of coffee. In the aftermath of independence, while competitors struggled to gain access to the coveted raw material, Delta had its warehouses full.

“The connection to coffee from Angola is historic and remains strong,” says Alberto Pinto, “which is why Delta sought to return as soon as it could restart the business, something that happened 25 years ago.” Rui Miguel Nabeiro explains that this return began with an invitation from the Angolan government.

“My father [João Manuel Nabeiro] went to Angola to visit factories, because they wanted to rebuild the coffee industry. We ended up making a recovery agreement for Liangol, a freeze-dried coffee factory, and we set up Angonabeiro.”

This is how a factory that had been inactive since 1984 was rehabilitated and modernised, and in 2001 began producing Ginga coffee, an own-brand, 100% Angolan, whose symbol is one of the most emblematic figures in the country’s history. “Ginga coffee was created by us. It is our flagship brand in Angola, which we also sell in Portugal in capsules and beans,” says Rui Miguel Nabeiro.

But Delta only ensured the management of the factory. It was only in 2015 that the factory definitively passed into the hands of the Campo Maior company, becoming Delta’s only factory outside Portugal.

Today, Angonabeiro produces Ginga brand coffee in beans, ground, and also in capsules. “These are capsules for the Delta Q system, of course,” says Alberto Pinto. While the coffee roasted and packed at the Campo Maior factory is destined for the rest of the world, the coffee from the Angolan factory is mainly for domestic consumption, but not only.

People also drink Ginga coffee in Portugal, France, Switzerland, and in several other African countries.

In human resources, Angola – which, together with Brazil, is part of the Regional General Directorate led by José Carlos Beato – is Delta’s second-largest operation outside Portugal, with close to 115 employees. The third, it should be added, is the French operation, with around 70 people.

“It has been a profitable business in recent years. It faces one challenge, as Brazil does as well, which is the exchange rate issue. If the currency is favourable, we benefit. If it plunges, the impact on results is immediate,” the CEO notes. “It is part of the business.”

Brazil

The expansion of Delta continues with a focus on countries where the Portuguese emigrant community has a strong presence. It always operates through direct operations, in other words, by opening companies. This is the case of Novadelta França, based in Paris with branches in Orleães, Lyon, Bordéus, Pegomas and Nantes. Luxembourg followed, where the local Novadelta was formed in 2011 with the aim of marketing the full range of agri-food products, not only in the Grand Duchy but also in Belgium and the Netherlands.

After reaching Portuguese communities in Europe, Grupo Nabeiro set course for São Paulo, where it established Delta Foods in 2012. The group had already crossed the Atlantic in 2004, but indirectly, in partnership with another company, Eurobrasil, which placed roasted and packaged coffee from Campo Maior in more than 60 Brazilian coffee shops, mainly in shopping centres, airports, and other high-traffic areas. Eight years later, after direct entries into France and Luxembourg, the group strengthened its presence in Brazil.

“We had the opportunity to sell Delta Q capsules to the Pão de Açúcar group, but the group said it would not buy directly from Portugal, so we had to set up a local company to start the business in Brazil with the Pão de Açúcar group,” recalls Rui Miguel Nabeiro. “Later, the opportunity arose to take a stake in the distributor Q Brasil, which is now the company we have in the state of Espírito Santo [north of Rio de Janeiro].”

“Performance is completely different in the countries where we are present directly,” says Alberto Pinto. “As a rule, Portuguese people are well integrated into the community, which also helps to promote the brand. In addition to being in São Paulo and in Vitória, the capital of Espírito Santo, we have distributors in several other states.”

From Brazil came the insight that internationalization could move in two directions. This became clear in April 2023, when the company launched a new coffee shop concept in Portugal. These are stores and kiosks located mainly in shopping centres, airports, and other areas with high pedestrian traffic. If it sounds familiar, that is because it is.

The new concept is called Deltaespresso. It is the network that already includes dozens of coffee shops – 75 so far – spread across Brazil. By the end of 2023, the aim is to open six stores and kiosks in Portugal. They will operate under a franchising model, which is a first for Delta. The goal, after importing the concept from Brazil, is to export it. “Deltaespresso has very strong internationalisation potential. We want to reach the global top 10 of coffee brands,” said Rui Miguel Nabeiro at the launch of the concept.

China

Given that tea culture in China is so dominant, complex, and far‑reaching, with millennia‑old roots that go back to the Han dynasty (206 BC – AD 220), was it really justified for Delta to open a branch there to sell coffee? Alberto Pinto, director for international markets at Grupo Nabeiro, answers: “China is a country where people drink tea, but it is starting to move into coffee. Delta’s international competitors were entering the market there, so it made sense to establish a presence before coffee consumption took off. It allows us to keep learning how to work within a very different culture, where consumption habits are very different.”

The connection was already in place. In 2006, Rui Nabeiro and two Portuguese entrepreneurs living in Macau joined forces to open a venue that served Delta coffee and Portuguese pastries, Ruby Café. In Macau, Delta coffee was already sold in some food service spaces, but the brand’s presence in the territory was limited. Increasing exports to China – which had by then already taken back the administration of Macau, after centuries of Portuguese rule – was the goal, but it would still take a few more years to get there.

It would take until 2015 for Delta Food Shanghai to be created, whose main activity is the promotion and sale of coffee and complementary products of Grupo Nabeiro in the Asian market. From its headquarters in Shanghai, Delta operates directly in China and coordinates commercial activity in Macau, Hong Kong, South Korea, Japan, and Thailand.

In China, coffee consumption is low, which makes it difficult to distribute it in ground form, as beans, and in Delta Q capsules. For this reason, the business develops mainly through the internet.

Even so, Delta did manage to have a distributor, the result of one of those coincidences in life. “I did a training course in China where I shared a house with a director from PwC. In a conversation I said to him: ‘You, who audit every company here in China, should find us a distributor,’ and they did.” Some retail chains ended up stocking Delta products, while digital channels were also explored. “We started doing business directly with the Alibaba group. We entered the online stores. It is a business that grows slowly. It is almost entirely digital. In China, everyone buys on the internet.”

In other words, the model adopted is completely different from the one Delta follows in Portugal and in other markets, which is based on physical proximity and on visiting the client. It is a long-term commitment, to be built at Delta Food Shanghai step by step, by a team made up of João Carvalho and two Chinese colleagues.

Poland

After Portugal, Poland is one of the countries where people drink the most Delta Q. In the brand’s international expansion, coffee capsules have played an important role in opening doors in markets where the connection to our country is less evident. This was the case in Poland, where Delta does not have its own commercial department. “We entered in 2019 through an exclusive partnership with Jerónimo Martins. We sell in their stores, in the Biedronka chain, and Delta Q machines are already in 300,000 Polish homes. We have a market share of 22%. It is a source of pride,” says Rui Miguel Nabeiro.

Delta Q coffee is sold in more than 3,300 stores, spread across 1,100 Polish towns and cities. It is a distribution network to be envied, with Biedronka already the Group Nabeiro’s third-largest customer in terms of turnover. “Things are going as we expected,” says Alberto Pinto. “It is a market with almost 40 million inhabitants, different from what we were used to. There is no Portuguese community of significant size where we could have started.”

The Polish venture started almost from scratch with Delta Q, in an exclusive partnership with the retailer that belongs to the Jerónimo Martins group. “We cannot sell to anyone else, and anyone who has Delta Q must go to a Biedronka store to buy capsules. It is a win-win situation, a real partnership between two Portuguese companies,” stresses Rui Miguel Nabeiro.

But when we talk about the Delta universe outside Portugal, we are not talking only about capsules. “We are talking about everything,” says Alberto Pinto. The international area sells coffee – which is still by far, and will continue to be, the main business – but there are other categories and channels to consider.

And there are more than 20 categories that Delta sells abroad. This is the case for wine and olive oil from Adega Mayor, olives from the Qampo brand or, to give just one more example, water from Águas do Alardo.

But the business does not live on its own products alone. Delta also takes on the distribution, abroad, of products from other families. In Switzerland, it partners with Sumol+Compal and distributes Sagres and Super Bock beers. In Angola, it ensures the distribution of Gorila chewing gum and Dan Cake cakes, as well as selling Marimba pasta, one more among the dozens of brands of Grupo Nabeiro. Delta Q remains the product that opens doors, but once inside, Delta goes in with its full offer. “In theory, it is more effective to sell a broad range of products,” explains Alberto Pinto, “although we do not give up on growing our client portfolio.” These are two strategic pillars for growth: internationalisation and diversification.

Dubai

Dubai is a remarkable market, where tourism plays an essential role for Delta. “The hotels are very large and we always expect to win an important hotel unit,” says Rui Miguel Nabeiro. “And there are very interesting restaurants that buy our coffee,” he adds. In fact, it is Delta coffee that is served to customers at the Nusr-Et restaurants in Dubai and Abu Dhabi, owned by Turkish chef and entrepreneur Salt Bae – famous on the Internet for his theatrical performance that turned the act of salting meat into a show.

“I believe we can find Delta anywhere in the world. If it is not sold by us, it will be sold by others,” says Dinis Cunha, sales director for international markets. “We are in the Maldives, where we have a distributor. We are in Sri Lanka and Bermuda, also with a distributor, and the same is true for the Middle East.”

In Dubai they tried something new: a hybrid model. “We had one of our employees there to help develop the business. In the meantime, we changed distributor and at the moment we have one of their people, but paid by us,” explains Rui Miguel Nabeiro.

In Dubai and Saudi Arabia, Delta is present mainly in hotels, restaurants, and cafés (the Horeca channel). This is the case in most international markets, but not in all. “In Luxembourg, for example, the main channel is retail, which accounts for two thirds of the business.” The presence, or absence, of a Portuguese community makes the difference. Dinis recalls a funny story that happened to him recently, when he went to Canada.

Expo Dubai, in 2020, was an important moment for Delta’s presence in the region. It was a multicultural venue, with people from 190 nationalities and a major hub connecting Asia, Europe, and Africa. “We were in the Pavilhão de Portugal with Chakall, who had a restaurant there.”

In Saudi Arabia, it was with Delta Q that the business took off. “When we finish this conversation, I will have a meeting with our distributor about a large hotel chain in Saudi Arabia that Delta Q is about to enter,” he reveals. It is also a reminder that consumption in hotel rooms is another way to introduce Portuguese coffee to customers from all over the world.

Still regarding Saudi Arabia, the expectation is that it will very soon become a more important market than Dubai. This may even happen during 2023. “There is a part of the Arab world that is turning towards Saudi Arabia. The government has a plan to restructure the country, open it to tourism, and make it the centre of the region by 2030.”

South Korea

Portuguese communities abroad were the starting point for Delta’s international expansion – but they have by no means been the final destination. “We are not an exporter,” stresses Rui Miguel Nabeiro. “We invest in markets and we want to build our brand, because that is the best contract we can make with any client: the brand, what it is worth, its attributes, and the quality of its products.” Once the emigrant communities were won over, in recent years the challenge has been to bring the nationals of those countries to the counter as well, and have them say: “I want a Delta.”

“We are brand makers in the geographies where we choose to be present,” adds Alberto Pinto. “In some geographies with greater ambition, with direct operations, and in others with ambition that matches our partners.” The partner is not always a company that distributes to cafés, restaurants, and hotels in its country, or a retailer with stores across the territory. Sometimes the partner can simply be a man who fell in love with Delta. In South Korea, that man is called Ki Seok Lee.

It was during a visit to Portugal that Ki Seok Lee became intrigued by the five letters (D-e-l-t-a) he kept seeing inside a red triangle almost everywhere, every day. “I noticed Delta Cafés already at the airport, then I saw the brand at service stations, restaurants, and pastry shops.” After tasting the coffee, he did not rest until he introduced it to Koreans. He achieved this in August 2021, when he opened a small space – just a counter and a window onto the street – in the heart of Seoul, 400 meters from the royal palace Gyeongbokgung, surrounded by markets, restaurants, galleries, and museums. He called it Sorry Espresso because it serves only espresso coffee – from Delta, of course. To go with the coffee, there are pastéis de nata. The Sorry Espresso cafés are a refuge of portugalidade in Seoul.

The first two weeks caused concern. In the third week, however, customers began to try it and did not stop. In January 2021, the second café opened, strategically close to the Portuguese and Brazilian embassies. The combination of Delta coffee and pastel de nata seems to have won over Koreans: the chain is expanding and there are plans to reach 20 stores by the end of 2023.

Managed from the Shanghai branch in China by João Carvalho, South Korea is growing at its own pace. “It is going well, things are moving forward.” The spirit is always the same: be present and grow from there. Rui Miguel Nabeiro concludes: “It is a small business, they are stores, but it is another market where we have planted our flag.”